DCIT, Circle-17(2), Hyd, Hyderabad V. Viceroy Hotels Ltd., Hyd, Hyderabad

ITA 287/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6016 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-12-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 11-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P CHANDRA SEKHAR
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Reassessment proceedings
• Section: 143(3); 148

Judgement Text

ITA NO 28 7 OF 2016 VICEROY HOTELS LTD HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.287/HYD/2016 (ASSESSMENT YEAR: 2007-08) DCIT, CIRCLE 17 ( 2 ) HYDERABAD VS M/S. VICEROY HOTELS LTD HYDERABAD PAN: AABCP 2279 G FOR REVENUE : SHRI P. CHANDRA SEKHAR, DR FOR ASSESSEE : SHRI P. MURALI MOHAN RAO O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR THE A.Y 2007-08. IN TH IS APPEAL, THE ONLY GROUND RAISED BY THE REVENUE IS AS UNDER: THE LEARNED CIT (A) ERRED IN HOLDING THAT PROVISIONS OF SECTION 40(A)(IA) CANNOT BE INVOKED IN RESPECT OF PAYMENTS WHICH WERE ACTUALLY MADE DURING THE FINANCIAL YEAR BUT IT CAN BE INVOKED ONLY WITH RESPECT TO THE AMOUNTS WHICH REMAINED PAYABLE AS ON 31 ST MARCH WITHOUT APPRECIATING THAT IN THE CONTEXT OF SECTION 40(A)(IA) OF THE ACT THE TERM PAYABLE WOULD INCLUDE AMOUNTS WHICH ARE PAID DURING THE PREVIOUS YEAR. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, W HICH IS INTO THE BUSINESS OF 5 STAR CATEGORY HOTEL, FILED I TS RETURN OF INCOME FOR THE A.Y 2007-08 ON 31.10.2007 DECLARING T OTAL INCOME AT RS. NIL. INITIALLY THE ASSESSMENT WAS COMPLETE D U/S 143(3) OF DATE OF HEARING : 23.03.2017 DATE OF PRONOUNCEMENT : 31.03.2017 ITA NO 28 7 OF 2016 VICEROY HOTELS LTD HYDERABAD PAGE 2 OF 4 THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSE E AT RS.67,36,987. THEREAFTER, THE ASSESSEES CASE WAS R EOPENED BY ISSUANCE OF NOTICE U/S 148 IN CONNECTION WITH THE T AXATION OF THE CAPITAL GAIN ON SALE OF PROPERTY DATED 2.2.2007. DU RING THE REASSESSMENT PROCEEDINGS, NO ADDITION WAS MADE BY T HE AO. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) AGAINST THE DISALLOWANCE OF AUDIT FEE AND THE DISALLOWANCE OF C REDIT CARD COMMISSION U/S 40(A)(IA) OF THE ACT DURING THE ASSE SSMENT PROCEEDINGS U/S 143(3) OF THE ACT. THE CIT (A) DELE TED THE DISALLOWANCES BY CONSIDERING THE DECISION OF THE HO N'BLE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILLYN SHIPP ING & TRANSPORT VS. ADD.CIT IN ITA NO.477/VIZ/2008 DATED 29.03.2012 WHEREIN IT WAS HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE APPLICABLE ONLY WHEN THE AMOUNT REMAINED PA YABLE. ACCORDINGLY THE CIT (A) DELETED THE ADDITIONS MADE BY THE AO AND THE REVENUE IS IN APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THERE WAS NO AMOUNT PAYABLE AS ON 31 ST MARCH OF THE RELEVANT PREVIOUS YEAR AND THEREFORE, THE ISSUE IS FAIRLY CO VERED IN FAVOUR OF THE ASSESSEE IN THE CASE OF MERILLYN SHIPPING & TRA NSPORT VS. ADD.CIT (CITED SUPRA). HE FURTHER DREW OUR ATTENTIO N TO THE DECISION OF THE HON'BLE ANDHRA PRADESH HIGH COURT I N THE CASE OF M/S. JANAPRIYA ENGINEERS SYNDICATE IN ITTA NO.352 O F 2014 WHEREIN THE HON'BLE HIGH COURT HAS DIRECTED THE TRI BUNAL TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW INSPITE OF THE SUSPENSION OF THE DECISION OF THE SPECIAL BENCH IN THE CASE OF MERILLYN SHIPPING & TRANSPORT (SUPRA). FURTHER, HE HAS ALSO PLACED RELIANCE UPON THE DECISION OF THE CBDT CIRCULAR NO. 56/2012 ITA NO 28 7 OF 2016 VICEROY HOTELS LTD HYDERABAD PAGE 3 OF 4 DATED 31.12.2012 WHEREIN THE CBDT HAS DIRECTED THAT THE CREDIT CARD OR DEBIT CARD COMMISSION DOES NOT REQUIRED TDS TO BE MADE. 4. THE LEARNED DR, HOWEVER, RELIED UPON THE ORDER O F THE AO. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ISSUE IS FAIRLY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS CITED BY THE LEARNED COUN SEL FOR THE ASSESSEE AND ALSO FURTHER BY THE JUDGMENT OF THE HO N'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. ALLAHAB AD H.C IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES LTD, REPOR TED IN 357 ITR 647 WHICH HAS APPROVED THE ABOVE DECISION OF THE SP ECIAL BENCH AND SUBMITTED THAT THE HON'BLE SUPREME COURT HAS DI SMISSED THE SLP(2013)262 CTR (ALL)545 FILED BY THE REVENUE AGAI NST THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES LTD (SUPRA). FURTHER, THE CBDT ITSELF HAS CLARIFIED VIDE CIRCULAR NO.56/2012 DATED 31.12. 2012 THAT THE CREDIT/DEBIT CARD COMMISSION DOES NOT REQUIRE TDS T O BE MADE. IN VIEW OF THE ABOVE, WE SEE NO REASON TO INTERFERE WI TH THE ORDER OF THE CIT (A). 6. IN THE RESULT, REVENUES APPEAL IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2017. SD/- SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 31 ST MARCH, 2017. VINODAN/SPS ITA NO 28 7 OF 2016 VICEROY HOTELS LTD HYDERABAD PAGE 4 OF 4 COPY TO: 1 DCIT, CIRCLE 17(2) 6 TH FLOOR, B BLOCK, IT TOWERS, AC GUARDS, HYDERABAD 2 M/S. VICEROY HOTELS LTD, 1-3-1036/3/1 TANKBUND RO AD, GANDHINAGAR HYDERABAD 500080 3 CIT (A)-5 HYDERABAD 4 PR. CIT 5 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER